Sun Country Airlines is the latest carrier to seek reorganization under the US bankruptcy code now that its parent company Petters Aviation has filed for Chapter 11.

The Minnesota-based carrier failed to receive a short-term loan from Petters, a subsidiary of Petters Group Worldwide, which is mired in a federal fraud investigation.

Sun Country says it will continue to operate and fly its regular flight schedule.

"We were forced to take this action as a result of recent events at Petters Group Worldwide. We do not anticipate any disruptions, and expect to operate business as usual," Sun Country chairman and CEO Stan Gadek says in a statement.

The carrier will defer wages to balance costs until revenues pick up as the peak winter travel season begins. Management plans to defer 50% of employee wages starting on 7 October.

Pilots represented by Air Line Pilots Association (ALPA) have not finalized their position regarding the cuts. Last week the carrier also notified employees it could cease operations or institute layoffs within 60 days, or as early as 1 December, as required by the US federal WARN act.

Sun Country employs 850 people, with staffing 1evels rising to 1,150 during the peak season, a spokeswoman says.

The carrier joins Frontier Airlines in Chapter 11 reorganization after the Denver-based carrier filed for bankruptcy protection earlier this year.

Aloha Airlines, ATA Airlines and Skybus Airlines are among the US carriers that have ceased operations in 2008.

Source: Air Transport Intelligence news